How one CEO protects his assets

In today’s environment of geopolitical instability, shifting regulatory winds, and post-pandemic economic uncertainty, the allure of alternative investments has intensified. But Thomas Bartholomew, president and CEO of Bartholomew & Company, is not sold on the idea that these instruments have suddenly transformed into financial safe havens.

“I’m not sure that they are safe havens in this climate,” he explains. “I’m not sure they’re any different than they were before the first of January anymore.”

His view challenges the prevailing narrative in some corners of the investment world that infrastructure, hedge funds, and private equity have matured into modern-day anchors of stability. Instead, Bartholomew maintains that while investor interest in alternatives has grown, their risk profile hasn’t fundamentally shifted.

“Are people turning to them? Yes. Are they safe havens? Everything’s relative,” he says.

The real driver behind the uptick in conversations around alternatives, he explained, is performance-based. Coming off strong years in 2023 and 2024, investors are now eyeing strategies that offer reduced correlation to traditional asset classes.

“We wanted to have less correlation in the portfolio amongst all asset classes, that conversation has now spilled into 2025 because of what’s going on,” he says.

Global conflicts, inflation anxiety and interest rate uncertainty have creeped into market sentiment, paired with more subtle signals that the recent bull run might not be sustainable according to Bartholomew. For many investors, particularly high-net-worth individuals and institutions, the pivot is not necessarily about safety. It’s about returns, diversification, and mitigating downside risk.

“I think many clients are absolutely convinced that we’re not going to have the same kind of returns going forward that we’ve had the last couple years,” he says.

Bartholomew sees increased activity in private credit, though he’s quick to temper enthusiasm with a warning: the asset class remains widely misunderstood. “It’s a high yield asset class; it’s a leveraged asset class. There’s a lot of risk in it,” he says.

As advisors, Bartholomew sees his firm in a proactive role, initiating client discussions before anxiety sets in.

“When I go to the doctor and say, I don’t feel well, I don’t tell them which medications I want to take,” he explains. “I think we’re the ones who are bringing it to the client saying, I know you have got some concern about what’s going on here. So, let’s talk about what we can do to try to diversify.”

In terms of allocation trends, he’s seeing greater interest in private equity from both high-net-worth and institutional investors. But not across the board. “Not more in the fixed income space, more high-quality short duration. So, more treasuries than ever before,” he says.

Liquidity has become the hedge for Bartholomew. Clients are building their own buffers with higher quality, shorter duration holdings, rather than relying solely on traditional hedging strategies.

“There’s a lot of banks in trouble in this country right now that people won’t talk about,” he says. “Balance sheets are still upside down from five years ago. They’ve got 2–3% mortgages on the books and they carry 65 cents on the dollar. And nobody’s talking about it.”

With this in mind, Bartholomew is urging caution around illiquidity. The more exposure to illiquid assets, the more liquid, safe fixed income he recommends offsetting the risk.

“If something goes awry with that risk of illiquid or limited liquidity or impaired liquidity, I’ve got 100% liquidity, essentially on the other end to balance that liquidity risk,” he says.

Even in real estate, the shifts are uneven. Multifamily investments are rising, but not just because of market speculation according to Bartholomew, who points to the imbalance in demographics.

“There’s not enough keys for doors for the people need to live,” he says. “We just don’t have enough housing in this country.”

Yet real estate isn’t a monolith. He pointed to a “strange anomaly” in Naples, Florida, where inventory has surged. “There’s more properties for sale than there have been in many, many years,” he says, citing conversations with a broker friend who pegged supply at two years.

Meanwhile, in cities like New York, there’s a different story. “Midtown Manhattan office spaces seem to be picking up,” he says, attributing this in part to a back-to-office shift that could drive a rebound in high-end urban commercial real estate.

Regulation is another theme he keeps a close eye on—particularly U.S. tax policy and how it impacts the hedge fund industry. “Tax Policy with carry on carried interest is always number one A within the hedge fund space, right?” he says.

Bartholomew believes the current tax policy will likely be extended, and less regulatory interference would be a boon to dealmaking. He referenced a $32 billion Google acquisition as evidence that the regulatory climate may be warming.

“I got to believe that there’s reason to think that they’ve already had the conversation with the regulators to make sure it’s going to happen,” he says.

Monetary policy also looms large. Jerome Powell’s steady hand has reassured markets for now, but risks remain — particularly around employment numbers that haven’t fully baked into Fed models.

“We haven’t seen unemployment from the government sector kick into the numbers yet,” Bartholomew notes. “How’s that going to affect the Fed? That’s going to be a concern.”

As international markets begin to pick up headwinds, Bartholomew emphasizes the importance of global investments. A weakening dollar has finally started to benefit global allocations, which for years underperformed domestic investments.

“The international parts of our portfolio are starting to back and fill nicely,” he says.

While holding alternatives is a key component of Bartholomew’s portfolio, he says he hedges the risk of alternatives with shorter term fixed income with 100 per cent liquidity. According to Bartholomew, this diversification allows him to remain confident in his alternative assets while having more certainty as a backdrop.

“It’s not just I own stocks and bonds and I’m going to buy alternatives,” he says. “You better also have cash liquidity available to offset that illiquidity risk.”